Its conference championship weekend in the NFL. The winners of the two games on Sunday will play in two weeks in the Super Bowl. The Indianapolis Colts play the New England Patriots in the late game. The first game has my beloved Green Bay Packers visiting the defending champs the Seattle Seahawks. A tough place to win so I’m hoping Aaron Rodgers and the rest of the team are up to the task.

While you are waiting for the game or if you are not into football here are a few financial articles I suggest for some good weekend financial reading:

With the end of another year upon us ‘tis the season for New Years resolutions. Many of us might want to lose weight, change careers, eat healthier as examples. A recent study by Fidelity indicated that only 31 percent of Americans would be making financial resolutions for 2015. This is down from 43 percent at this time last year.

Do financial resolutions work? According to the Fidelity study:

“For those who say they made a financial resolution at the start of 2014, more than one-half (51%) now feel they are better off financially. In contrast, only 38% of those who did not can say the same.”

Many of you reading this might be saying I can do this myself; I don’t need a financial advisor. Reality check how has that worked out for you? What did you do with your investments at the depth of the 2008-2009 market down turn? Are you really on track for retirement?

If you don’t like the answers, suck it up and get the professional help you need. At some point you get too old for financial do overs. Check out this excellent guide to finding a financial advisor. Perhaps an online financial advisor is the right choice, more and more options are available here seemingly every day.

Review your investments on a regular basis

Review and rebalance your portfolio at least annually. This is a basic tool for risk control.

Review your individual investment holdings at least semi-annually. This includes mutual funds, individual stocks, closed-end funds, ETFs and others. Ask yourself why you own each holding, how does this investment compare to its peers, if would you buy it today and is the investment still meeting your expectations.

Be sure to review your investments and your asset allocation as an overall portfolio across all accounts. This includes IRAs, 401(k)s and taxable accounts

Take charge of your retirement savings

If you are employed make sure that you are taking full advantage of your company’s 401(k) plan or similar retirement savings vehicle. Don’t ignore this you will only regret it down the road.

Make sure that you have selected the best choices from the investment menu available to you.

Contribute the maximum that you can afford via salary deferral. The 2015 maximum 401(k) deferral amounts are $18,000 for those under 50 and $24,000 for those who will be 50 or over at any point during 2015. At the very least try to contribute at least enough to earn the full company match if one is offered.

If you will be leaving your current employer make sure that you make a proactive choice as to what to do with your 401(k) balance. Leave it where it is, roll it to your new employer’s plan (if allowed and applicable) or roll it to an IRA account.

Don’t forget about an IRA contribution. Depending upon your situation you may or may not be able to contribute on a tax-deferred basis, this will depend upon your income and whether you are covered by a retirement plan at work. A Roth IRA might be an option again there are income restrictions to be aware of. A spousal IRA might also be an option for a non-working spouse under certain circumstances.

Especially if you are within 10-15 years of retirement make sure to get a copy of your Social Security statement and check it to ensure that you are getting credit for all earnings. Note also that there are a number of Social Security claiming strategies that you might consider to maximize your benefits.

Corporate pension buyout offers have been in the news lately with Hartford Financial Services offering lump-sum payment options to former employees and with Boeing offering a choice of lump-sum or annuity payments to a similar group.

Other major corporations have made similar offers in recent years including General Motors, who actually offered retired employees a “pension do-over.”

The answer to the question of whether you should accept a pension buyout offer is that it depends upon your situation. Here are a few things to consider.

Are they sweetening the deal?

I don’t know the details of either the Hartford or the Boeing offers but I have to think they are offering these former employees some sort of incentive to forgo their normal pension and to take the buyout offer. Perhaps the lump-sum is a bit larger and in the case of the Boeing offer the annuity payments are a bit better. Or perhaps there normally wouldn’t be a lump-sum option available from the pension plan so this in and of itself is an incentive.

Remember the incentive for the companies offering these deals is to get rid of these future pension liabilities. The potential cost savings and impact on their future profitability is huge.

There has been much written about financial advisors who troll large organizations (both governmental and corporate) looking for large numbers of folks with lump-sums to rollover. In some cases these advisors have moved this rollover money into investments that are wholly inappropriate for these investors. As always be smart with you money and with your trust. Be informed and ask lots of questions.

Do you have concerns about the company’s financial health?

Do you have doubts about the future solvency of the organization offering the pension? This pertains to both a public entity (can you say Detroit?) and to for-profit organizations like Hartford Financial and Boeing. In the latter case pension payments are guaranteed up to certain monthly limits set by the PBGC. If you were a high-earner and your monthly payment exceeds this limit you could see your monthly payment reduced.

While I am not familiar with the financial state of either Hartford Financial or Boeing I’m guessing their financial health is not a major issue. However if you receive a buyout offer you might consider taking it if you have concerns that your current or former employer may run into financial difficulties down the road.

Who guarantees the annuity payments?

If the buyout offer includes an option to receive annuity payments make sure that you understand who is guaranteeing these payments. Typically if a company is making this type of offer they are looking to reduce their future pension liability and they will transfer your pension obligation to an insurance company. They will be the one’s making the annuity payments and ultimately guaranteeing these payments.

This is not necessarily a bad thing but you need to understand that your current or former employer is not behind these payments nor is the PBCG. Typically if an insurance company defaults on its obligations your recourse is via the appropriate state insurance department. The rules as to how much of an annuity payment is covered will vary.

An additional consideration in evaluating a buy-out option that includes annuity payments of this type is the fact that most of these annuities will not include cost of living increases. This means that the buying power of these payments will decrease over time due to inflation.

What other retirement resources do you have?

If you will be eligible for Social Security and/or have other pension plans it quite possibly will make sense to take a buyout offer that includes a lump-sum. Take a look at all of your retirement accounts and those of your spouse if you are married. This includes 401(k) plans, 403(b) accounts, IRAs, etc. This is a good time to take stock of your retirement readiness and perhaps even to do a financial plan if don’t have a current one in place.

The Bottom Line

I’m generally a fan of pension buyout offers, especially if there is a lump-sum option. As with any financial decision it is wise to look at your entire retirement and financial situation and to have a plan in place to manage this money. Where an annuity is also available you need to understand who will be behind the annuity and to analyze whether this is a good deal for you. I suspect that pension buyout offers will continue to be offered by more and more organizations seeking to reduce their pension liability. You need to be prepared to deal with an offer if you receive one.

We are nearing the final third of 2014. Labor Day is upon as is the start of the 2014 football season. College football starts this weekend. Next week my beloved Packers start their quest for the Super Bowl against the Seahawks. Kudos to the Little Leaguers from Jackie Robinson West, Chicago’s best baseball team by far.

Though most of 2014 is behind us there are still plenty of things left to do financially in 2014. Here are eight financial to do items for your list.

Review your 401(k)

With the S&P 500 and other market indexes at or near all-time highs this is a good time to revisit your 401(k) asset allocation and to rebalance if needed. Better still why not take this time to active the auto-rebalance feature if your plan offers this feature?

Are you on-track to contribute the maximum to your 401(k) this year? If you are not there is still time to increase your salary deferral if you can afford it. The maximum contributions are $17,500 and $23,000 if you will be 50 or over at any point during 2014. Even if you can’t contribute the maximum amount this is still a good time to bump your deferral if you can.

Prepare for employee benefits open enrollment

Open enrollment has always been important. But with the advent of Obama Care and the efforts of many employers to rein in health insurance and all benefits costs, it is more important than ever to manager your employee benefits as an important part of your overall compensation.

I suggest reviewing your usage year to date. Once the materials are issued for your employer’s open enrollment be sure to review them carefully with an eye towards any changes in various benefits. You can then look at your current usage and anticipated changes in your personal circumstances in combination with the new benefits menu to make the best choices for you and your family.

Also note that many organizations use this time frame to roll out any changes in the 401(k) menu or other changes in the plan so keep an eye out for that as well.

Update your estate planning documents

The recent deaths of celebrities such as Robin Williams and Lauren Bacall remind us of our own mortality. If you don’t have a will, a named guardian for your minor children, or other estate planning documents as appropriate for your situation it is time to get moving and get this done. The cost of being unprepared can be devastating to your family and loved ones and can frankly distort their memories of your life.

Along these lines also double check your beneficiary designations on retirement accounts, life insurance policies, annuities and other assets that pass via beneficiary designation to ensure that they are consistent with your intentions.

Get a retirement plan in place if you are self-employed

I’ve mentioned this here on the blog on several occasions, but it’s worth repeating. If you are self-employed you need to have a retirement plan in place for yourself. You work too hard not to do this.

Options to consider include a SEP-IRA, a Solo 401(k), a SIMPLE, or even a pension plan. If you do not have anything in place some plans such as the Solo 401(k) must be established by the end of the calendar year though you can fund them up to the time you file your tax return. Check the rules for any plan you are considering.

Don’t forget an IRA as well. If your ability to contribute is limited this can be a great way to start.

Check your Social Security statement

The Social Security Administration has indicated that if will begin mailing out statements again after halting this practice several years ago. Make sure to review your statement to be sure that you have received credit for all years worked and that you understand all of the benefits shown on your statement. You can also go their site to check your benefits as well.

Track down old pension and retirement accounts

As we move through our careers many of us will switch jobs a number of times. It is quite common to leave a number of retirement accounts, both 401(k)s and pensions in our wake. It is a good idea to take some time to make sure we are aware of all of these old accounts.

In the case of an old 401(k) or similar defined contribution account make a decision as to what to do with the account balance. You can typically leave it where it is, roll it to a new employer’s plan if allowed, or roll it over to an IRA. If it is a relatively small amount in relation to your other retirement and investment accounts it might make sense to consolidate with other money so you have one less account to keep track of.

In the case of a pension you may have a few options. At the very least you will want to ensure that your old employer has your current contact information and you will want to apprise them of any changes in the future. You may have an option to take the benefit as a lump-sum and roll it into an IRA or to receive a monthly benefit at some point in the future.

While old retirement accounts might seem small and insignificant, I’ve seen more than a few folks with several of them floating around. At some point this can become real money if you add it all up.

Review your investments and your strategy

With the markets at or near record highs this is a good time to review your investment holdings, your overall asset allocation, and your strategy going forward.

If you hold stocks how have they done? Are any of them at or near your selling price target (you have one right)? Is your allocation to stocks higher than your target? Are you now taking more risk than you desire? Have portfolio gains pushed you closer to your financial goals and is it time to take less risk?

With summer soon behind us and the end of the year approaching this is a great time to get your financial house in order. What are you waiting for?

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I’m often asked by folks approaching retirement whether to take their pension as a lump-sum payment or as an annuity (a stream of monthly payments). Investment News recently published this excellent piece on this topic which is worth reading.

As with much in the realm of financial planning the answer is that “it depends.” Everybody’s situation is different. Here are some factors to consider in deciding whether to take your pension payments as an annuity or as a lump-sum.

Factors to consider

Among the factors to consider in determining whether to take your pension payments as an annuity or as a lump-sum are:

Your pension payments have potential cost of living increases built-in (typical for public sector plans but not for private pensions).

Factors that favor taking payments as a lump-sum

A lump-sum distribution might be the right option for you if:

You are comfortable managing your own investments and/or work with a financial advisor with whom you are comfortable.

You have doubts about the future solvency of the organization offering the pension. This pertains to both a public entity (can you say Detroit?) and to a for-profit company. In the latter case pension payments are guaranteed up to certain monthly limits set by the PBGC. If you were a high-earner and your monthly payment exceeds this limit you could see your monthly payment reduced.

You are eligible for Social Security payments.

The factors listed above favoring either the annuity or lump-sum options are not meant to be complete lists, but rather are intended to stimulate your thinking if you are fortunate enough to have a pension plan and the plan offers both payment options. A full listing for each option would be much longer and might vary based upon your unique situation.

Moreover the decision as to how to take your pension payments should be made in the overall context of your retirement and financial planning efforts. How does each payment method fit?

Lastly those evaluating these options should be aware of predatory financial advisors seeking to convince retirees from major corporations and other large organizations to roll their retirement plan distributions over to IRA accounts with their firm. While this issue has seen a lot of recent press in terms of 401(k) plans it is also an issue for those eligible for a lump-sum pension distribution. If you are working with a trusted financial advisor an IRA rollover can be a viable option, but in some cases rollovers have been directed to questionable investment options putting many retirement investors at risk.

Please check out ourBook Storefor books on financial planning, retirement, and related topics as well as any Amazon shopping needs you may have (or just click on the link below). The Chicago Financial Planner is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com. If you click on my Amazon.com links and buy anything, even something other than the product advertised, I earn a small fee, yet you don’t pay any extra.

This post was written by Jim Blankenship, CFP®, EA, a fee-only financial advisor and owner of the excellent finance blog Getting Your Financial Ducks in a Row, where he covers IRAs, Social Security, Taxation, and most other aspects of financial planning. I’ve known Jim for a long time and consider him an expert on Social Security and many other topics. His blog is must-reading for me and should be for you as well.

The Social Security benefit landscape is a complicated and confusing place to navigate. It’s tough enough to figure out what is the best time to file for your own benefits, let alone trying to coordinate benefits for yourself and your spouse. There are many confusing provisions of Social Security; below is a brief explanation of 3 misunderstood aspects of Social Security benefits.

Spousal benefits

When one spouse is eligible for retirement benefits, the other spouse is also eligible for a benefit based upon the first spouse’s record. The largest Spousal Benefit is 50% of the other spouse’s Primary Insurance Amount (PIA). The PIA is equal to that individual’s benefit available at Full Retirement Age (FRA). Full Retirement Age is 66 for folks born between 1946 and 1954, increasing to age 67 for those born in 1960 or after.

An individual may receive the Spousal Benefit as early as age 62, at a reduced rate. The other spouse must have filed for his or her own benefit – and could have suspended benefits (see File and Suspend below).

The confusing parts. The following areas always seem to trip up folks as they plan for the Spousal Benefit.

Only one of the spouses can receive Spousal Benefits at a time. The other spouse must have filed or filed and suspended for his or her own benefit.

At or after FRA, the individual can receive Spousal Benefits alone, separate from the retirement benefit on his or her own record (see Restricted Application below). This allows the spouse receiving Spousal Benefits to delay receiving his or her own benefit, increasing that retirement benefit (via Delayed Retirement Credits).

Before FRA, filing for Spousal Benefits will result in a reduced Spousal Benefit. Plus, filing for Spousal Benefits before FRA will result in deemed filing for the individual’s own retirement benefit, with both benefits reduced.

File and Suspend

When the individual who is eligible for a retirement Social Security benefit reaches Full Retirement Age (FRA), the individual may voluntarily suspend receiving benefits. By suspending benefits, the individual has accomplished two things:

The individual has established a filing date for benefits. This means that the Social Security Administration has a record that the individual has filed for benefits. Since that record exists, other benefits become available based upon the individual’s Social Security record. Also, at some point in the future, the individual could change his or her mind and collect retroactive benefits from the established filing date to the present, continuing to receive monthly benefits as if the filing was never suspended.

The individual will not receive benefits while the suspension is in place. If the individual does not collect retroactive benefits at a later date (see #1 above), Delayed Retirement Credits will add to his or her future benefit. This amounts to an 8% increase in benefits per year of delay.

Restricted Application

As mentioned above, when an individual reaches Full Retirement Age (FRA) and is eligible for a Spousal Benefit, the individual may choose to file a Restricted Application for Spousal Benefits only. This type of application provides for the individual to receive *only* the Spousal Benefit, based upon his or her spouse’s record. By doing so, he or she can delay filing for his or her own benefit to a later date. With the delay, the individual’s own benefit will gain Delayed Retirement Credits; maximizing the benefit by age 70.

Please check out ourBook Storefor books on financial planning, retirement, and related topics as well as any Amazon shopping needs you may have (or just click on the link below). The Chicago Financial Planner is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com. If you click on my Amazon.com links and buy anything, even something other than the product advertised, I earn a small fee, yet you don’t pay any extra.

Are you within a few years of retirement? It’s time to get your financial house in order. Here are several items to include on your pre-retirement financial checklist.

Review your company benefits

Your 401(k) plan might be your largest and most significant employee benefit, but there may be others to consider as well. Does your company offer any sort of retiree medical coverage? Are there other benefits that you can continue at reduced group rates?

In the case of your 401(k) you will have choices to make at retirement. You will need to determine if you want to leave it with your soon-to-be-former employer, roll it into an IRA, or take a distribution. The last choice will likely result in a hefty tax bill, so this is generally not a good idea for most folks.

Do you have company stock options that you haven’t exercised? Check the rules here. Speaking of company stock, there are special rules called net unrealized appreciation to consider when dealing with company stock held in your 401(k) plan.

Do you have a pension from your current or former employer?

While a pension is certainly an employee benefit, I feel that it deserved its own section. You might have several decisions to make with regard to your pension benefit if you are fortunate enough to be covered by one.

If you have the option, do you take the pension as a lump-sum and roll over to an IRA or take it as a monthly annuity?

Generally there will be several annuity payment options to consider, which one is right for your situation?

These decisions should be made in the context of your overall financial situation and your ability to effectively manage a lump sum. Since any lump sum would be taxable, it is usually advisable for you to roll it over into a tax-deferred account such as an IRA. If you have earned a pension benefit from a former employer, be sure to contact your old company to get all of the details and to make sure they have your current address and contact information so there are no delays or glitches when you want to start drawing on this pension.

Determine your Social Security benefits and when to take them

While you can start taking Social Security at age 62, there is a significant reduction in your monthly benefit as opposed to waiting until your full retirement age. Further, if you can wait until age 70 your benefit level continues to grow. If you are married the planning should involve both spouses’ benefits. There are a number of sophisticated strategies surrounding couples and whose benefits to take and when so planning is very critical here.

Review all of your retirement financial resources

Over the course of your working life you have likely accumulated a variety of investments and other assets that can be used to fund your retirement which might include:

Your 401(k) or similar retirement plan such as a 401(b) or other defined contribution plan.

Well prior to commencing your retirement it is a good idea to review all of your anticipated assets and determine how they can be best utilized to support your anticipated retirement lifestyle.

Determine how much you will need to support your retirement lifestyle

While this might seem intuitive you’d be surprised how many folks within a few years of retirement haven’t done this. Basically you will want to put together a budget. Will you stay in your home or downsize? What activities will you engage in? What will your basic living expenses be? And so on.

Compare this to the income that your various retirement resources might generate for you and you will have a good idea if you will be able to support your desired lifestyle in retirement. Further you will need to do some planning in terms of which financial resources and accounts to tap at various stages of your retirement.

This is a very cursory “checklist” for Baby Boomers and others within a few years of retirement. This might be a good point to engage the services of a fee-only financial advisor if you’ve never done a financial plan, or if your plan is out of date. Retirement can be a great time of life, but proper planning is required to help ensure your financial success.

Please contact me with any questions you may have about retirement planning.

Check out an online service like Personal Capitalor purchase the latest version of Quicken to track where you are and if you are in the right track financially. Check out our Resources page for additional tools and services that you might find useful.

It’s a bit of a lazy Sunday here and I am half surfing the web and half watching the NCAA Men’s basketball tournament. I’m not the college basketball fan that I once was, but I still love March Madness and watch every game that I can.

Here are some financial articles that I’ve read lately that you might find interesting and useful:

Well that’s it I hope you enjoy some of these articles and the rest of your Sunday. I’ve watched a couple of good tournament games so far with hopefully more to follow. Cool and sunny here today, but none the less good grilling weather, chicken is on the menu for tonight.

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I use social media to interact with other financial advisors, to keep up with the latest financial and business news, and to share my thoughts with others. Here are some excellent financial blogs and websites that I follow via social media that you should check out.

Websites and Media

Market Watch is one of the best all around financial sites; I especially like their RetireMentors section which includes a variety of writers on topics useful to retirees and those planning for retirement. Robert Powell (twitter @RJPIII) provides some great insights on retirement-related topics.

Morningstar is still one of the best investing sites and their columnists provide some excellent insights into a variety of topics. I especially enjoy articles from their retirement guru Christine Benz (twitter @christine_benz) and John Rekenthaler.

US News Money provides a variety of articles on retirement, investing, and careers written by their staff writers and outside authors including yours truly. My posts appear on their Smarter Investor Blog. Columnist Kimberly Palmer’s Alpha Consumer articles are excellent as are Emily Brandon’s posts on the Planning to Retire blog.

Financial Bloggers

Fellow financial advisor Jim Blankenship’s (twitter @BlankenshipFP) Getting Your Financial Ducks in a Row is a must read blog for information on topics relating to retirement. Jim is an expert on Social Security and also provides great information on IRAs, taxes, and a variety of essential financial planning topics. Jim’s book 0n Social Security is a must read.

Mike Piper’s blog Oblivious Investor does a great job discussing a variety of investing and retirement related topics. Mike is also a published author on retirement, Social Security and several other topics.

The Dollar Stretcher is one of the oldest but still one of the best all-purpose financial blogs out there. Gary Foreman (twitter @Gary_Foreman) covers the full spectrum of personal financial topics.

The websites and blogs listed above are some of my favorites, but this is not meant to be an exhaustive list. Are there financial sites or online resources that you would recommend? Please feel free add to this list by leaving a comment.

A recent New York Times article discussed that a $1 million retirement nest egg isn’t what it used to be. While this is more than 90% of U.S. retirees have amassed, $1 million doesn’t go as far as you might think. That said I wanted to take a look at what it takes to provide $100,000 income annually during retirement.

The 4% rule

The 4% rule says that a retiree can safely withdraw 4% of their nest egg during retirement and assume that their money will last 30 years. This very useful rule of thumb was developed by fee-only financial planning superstar Bill Bengen.

Like any rule of thumb it is just that, an estimating tool. At you own peril do not depend on this rule, do a real financial plan for your retirement.

Using the 4% rule as a quick estimating tool let’s see how someone with a $1 million combined in their 401(k) s and some IRAs can hit $100,000 (gross before any taxes are paid).

Doing the math

The $1 million in the 401(k)s and IRAs will yield $40,000 per year using the 4% rule. This leaves a shortfall of $60,000 per year.

A husband and wife who both worked might have Social Security payments due them starting at say a combined $40,000 per year.

The shortfall is now down to $20,000

Source of funds

Annual income

Retirement account withdrawals

$40,000

Social Security

$40,000

Need

$100,000

Shortfall

$20,000

Closing the income gap

In our hypothetical situation the couple has a $20,000 per year gap between what their retirement accounts and Social Security can be expected to provide. Here are some ways this gap can be closed:

If they have significant assets outside of their retirement accounts these funds can be tapped.

Perhaps they have one or more pensions in which they have a vested benefit.

They may have stock options or restricted stock units that can be converted to cash from their employers.

This might be a good time to look at downsizing their home and applying any excess cash from the transaction to their retirement.

If they were business owners they might realize some value from the sale of the business as they retire.

If realistic perhaps retirement can be delayed for several years. This allows the couple to not only accumulate a bit more for retirement but it also delays the need to tap into their retirement accounts and builds up their Social Security benefit a bit longer.

It might be feasible to work full or part-time during the early years of retirement. Depending upon one’s expertise there may be consulting opportunities related to your former employment field or perhaps you can start a business based upon an interest or a hobby.